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AUSTIN, Texas--(BUSINESS WIRE)--Jun. 3, 2016--
Forestar Group Inc. (the “Company” or “Forestar”) (NYSE: FOR) today
announced that it and its wholly-owned subsidiary, Forestar (USA) Real
Estate Group Inc. (“Forestar USA” and, together with the Company, the
“Offerors”), have amended the terms (the “Amendment”) of its previously
announced cash tender offer (as amended, the “Tender Offer”). The
Amendment (i) eliminates the early tender premium and the early tender
deadline and (ii) increases the purchase price per $1,000 principal
amount of tendered notes through the expiration date for Forestar USA’s
8.500% Senior Secured Notes due 2022 (the “Outstanding Notes”) to
$1,135.00, plus accrued and unpaid interest (the “Purchase Price”), from
total tender consideration of $1,095.00 (including the early tender
premium), plus accrued and unpaid interest.

As previously announced, the Tender Offer will expire at midnight, New
York City time, on June 20, 2016 (the “Expiration Date”), unless the
Tender Offer is extended or earlier terminated. The Amendment does not
impact the Expiration Date. Holders of Outstanding Notes who validly
tender and do not withdraw their notes prior to the Expiration Date
(including holders who have previously tendered Outstanding Notes), and
whose notes are accepted for purchase, will receive the Purchase Price.
Tenders of Outstanding Notes may be withdrawn and consents may be
revoked at any time prior to the Expiration Date. All other terms of the
Tender Offer, as previously announced, remain unchanged.

The following table summarizes terms material to the determination of
the consideration to be received in the Tender Offer:

Holders may still validly tender their Outstanding Notes prior to the
Expiration Date. For more information regarding the Tender Offer and
related consent solicitation, see the Offer to Purchase and Consent
Solicitation Statement, dated May 23, 2016, and a related Consent and
Letter of Transmittal, as amended by the terms described herein. Holders
of Outstanding Notes are urged to read the Offer to Purchase and Letter
of Transmittal carefully before making any decision with respect to the
Tender Offer.

In addition to the Purchase Price, holders whose Outstanding Notes are
accepted in the Tender Offer will receive accrued and unpaid interest
from and including the most recent interest payment date (June 1, 2016),
and up to, but excluding, the applicable settlement date.

The Tender Offer and consent solicitation is contingent upon the
satisfaction of certain customary conditions. If any of the conditions
are not satisfied, the Offerors are not obligated to accept for payment,
purchase or pay for, and may delay the acceptance for payment of, any
tendered notes and may terminate the Tender Offer and consent
solicitation.

This press release does not constitute a notice of redemption under the
optional redemption provisions of the indenture governing the notes, nor
does it constitute an offer to sell, or a solicitation of an offer to
buy, any security. No offer, solicitation, or sale will be made in any
jurisdiction in which such an offer, solicitation, or sale would be
unlawful.

Jefferies LLC is acting as Dealer Manager for the Tender Offer and
Solicitation Agent for the consent solicitation. Questions regarding the
Tender Offer and consent solicitation may be directed to Jefferies at
(888) 708-5831 (toll free) or (203) 363-8273 (collect). Requests for
documents relating to the Tender Offer and consent solicitation may be
directed to Ipreo LLC, the Information Agent, at (888) 593-9546 or (212)
849-3880 (banks and brokers).

Forestar is a residential and mixed-use real estate development company.
The Company owns directly or through ventures interests in 57
residential and mixed-use projects comprised of 7,000 acres of real
estate located in 11 states and 15 markets. The Company also owns
approximately 590,000 net acres of oil and gas fee minerals located in
Texas, Louisiana, Georgia and Alabama. The Company has water interests
in 1.5 million acres which include a 45 percent nonparticipating royalty
interest in groundwater produced or withdrawn for commercial purposes or
sold from 1.4 million acres in Texas, Louisiana, Georgia and Alabama,
and 20,000 acres of groundwater leases in central Texas. The Company’s
non-core assets include 87,000 acres of timberland and undeveloped land,
and commercial and income producing properties, which consist of three
multifamily projects and two multifamily sites. Forestar operates in
three business segments: real estate, oil and gas and other natural
resources.

This release contains “forward-looking statements” within the meaning
of the federal securities laws. Forward-looking statements are typically
identified by words or phrases such as “will,” “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,”
and other words and terms of similar meaning. These statements reflect
management’s current views with respect to future events and are subject
to risk and uncertainties. Forestar notes that a variety of factors and
uncertainties could cause its actual results to differ significantly
from the results discussed in the forward-looking statements, including
but not limited to: general economic, market, or business conditions;
market demand for our non-core assets; changes in commodity prices;
opportunities (or lack thereof) that may be presented to the Company and
that Forestar may pursue; fluctuations in costs and expenses including
development costs; demand for new housing, including impacts from
mortgage credit rates or availability; lengthy and uncertain entitlement
processes; cyclicality of its businesses; accuracy of accounting
assumptions; competitive actions by other companies; changes in laws or
regulations; and other factors, many of which are beyond the Company’s
control. Except as required by law, Forestar expressly disclaims any
obligation to publicly revise any forward-looking statements contained
in this news release to reflect the occurrence of events after the date
of this news release.